It’s Looking Good for Sports Gambling Fans

A federal law that effectively bans commercial sports gambling across most of the nation faced skepticism at the Supreme Court on Monday. A majority of the justices indicated that the law had crossed a constitutional line by requiring states to do the bidding of the federal government.

New Jersey is leading the challenge to the law, and Chris Christie, the state’s governor, watched the argument from the front row.

Americans are estimated to annually place $150 billion in illegal wagers on sports. If the Supreme Court strikes down the law, dozens of states could quickly make such wagers legal and reap tax revenues from them.

Some details:

Officially Christie v. National Collegiate Athletic Associate, the case pits the state of New Jersey against the NCAA and the four major sports leagues in a battle over whether states have the right to legalize sports gambling. Put simply, New Jersey is for it and the sports leagues are ostensibly against it.

In 2014, New Jersey repealed a law that prevented sports gambling, but it was immediately challenged citing a 1992 federal law that prohibited state-sanctioned sports betting everywhere but Nevada, Oregon, Delaware and Montana. It didn’t ban sports betting, but it directed states not to permit it. That’s the crux of the argument the Supreme Court heard– whether the federal government directing states not to do something is the same as the government doing it themselves.

Why do states want it?

Tax revenue.

Illegal sports betting is a huge industry and many states, including Pennsylvania and New Jersey, would like to be able to get a piece of the pie.

Why don’t the NCAA and other sports leagues want it?

This is where things get fuzzy. The NCAA, which “employs” “amateur” “student” “athletes,” is likely concerned with match fixing. There have been cases of college players point shaving or throwing games for relatively little money (like $500). That isn’t as much of a concern in pro sports nowadays since players make so much money. Particularly in the NBA, where a relatively small pool of players shares a substantial chunk of cash (Joakim Noah makes $17 million per year). This isn’t the Black Sox– most professional athletes are rich and make more than they’d be willing to jeopardize for a small pay-off. There are exceptions, but largely, even with illegal betting, it hasn’t been a problem. And when you consider that, today, you can go to a casino and throw comically large sums of cash on a game of chance, sports betting at least carries with it a modicum of skill which can allow well-informed and pragmatic players to have success in the long run. It’s positioned somewhere between daily fantasy and spinning a roulette wheel with all of your money on black.*

*I’ve always envisioned throwing substantial amount of money – enough that would hurt to lose – on black and letting it ride. I’d have something like a 46% chance of doubling my money for a massive payout. Worth it? Maybe. But I’m just enough of a vagine to restrain myself.

Ironically, the NBA is technically a part of the case, fighting against the State of New Jersey. But they are way out ahead of other sports leagues, with commissioner Adam Silver speaking out in favor of legalized gambling (he even did so on the Sixers’ broadcast last week). They would like nothing more than for New Jersey to win the case.

Other leagues have been slower on the uptick, but it’s clear that gambling would benefit all of them.

It keeps fans engaged in more games, so from a TV rights and advertising revenue standpoint, it’s worth it.

Also, perhaps even more importantly, the leagues could get a chunk of the pie or themselves even facilitate the betting. There will be all sorts of opportunities that arise as a result of legalized sports gambling, and you bet the leagues and teams will want a piece of it.

What will a legalized sports betting future look like?

Go to London. Sports gambling is legal there, and Premier League teams even have betting windows in their stadiums. This goes for the lower-level clubs as well. And with few exceptions, match fixing hasn’t been an issue.

Most likely gambling will just become a part of the sports ecosystem. You’ll see ads during games, stats, lines and trends on broadcasts, and teams and leagues making it easy for you to get involved. The betting windows may be a thing of the past because it’ll be so easy to place a bet right on your phone, but, make no mistake, it will become a part of the in-game experience. The Sixers, who are on the bleeding edge of just about everything – they were among the first to partner with DraftKings and held a press conference in New Jersey with Allen Iverson for a PartyPoker sponsorship – will undoubtedly be aligned with the league in this regard. Consider their partnership with StubHub, which allows them to inject themselves into secondary market transactions, and you see how they would be eager to get a piece of the gambling pie. Never mind that Joshua Harris already has significant casino interests and is well on his way to purchasing the state of New Jersey as his own and having taxpayers cover the cost on his behalf.

Casinos are obviously well-positioned to offer up online opportunities, but so are the leagues themselves. Perhaps a white-label solution where you place a bet in an app branded with an NBA logo. And my guess is the daily fantasy companies will come forward and raise their hands, noting that they have hundreds of thousands, if not millions, of credit cards on file and can handle that sort of thing securely.

What are the arguments against it?

Obviously the match fixing issue, which we’ve already addressed. The dinosaurs against it don’t really have many other good arguments.

An opponent of gambling literally said the following: “In countries that have legalized sports gambling, like Australia and the United Kingdom, kids associate gambling with sports.”

“Well golly gee, I wouldn’t want to besmirch the good fun of sports by tainting it with the stain of monetary and borderless rooting interests outside the shackles of provincial pride” …a 9-year-old somewhere says as he adjusts his fantasy lineup.

There are other concerns about social ills – degenerates who can’t help themselves – but those folks are likely already gambling if they’re compelled to do so. Bringing it out of the shadows may hook more people, but it will also have less of a stigma attached to it and likely come with all sorts of ostensible barriers to prevent abuse. You know, things like disclaimers under the button that accepts your $100 deposit.

What else will it mean?

It’s going to be a fucking gold rush. For casinos, sports leagues, information sites, advertising and so on. Most sports news today isn’t aimed at gamblers. Sure, we get the lines and late-breaking injury news – which is directly aimed at them – but news, commentary, and analysis isn’t focused on it (though obviously much of it applies). I have an idea for a sports news and analytics site that would be aimed specifically at gamblers or, if you prefer, patrons. Most of the gambling sites now, with some exceptions, are mostly just loud-talking guys extolling their success and carefully massaging the data to make themselves look like some sort of greased-up oracle. News specifically framed with betting implications will be not only needed, but coveted. There’s that, but also casinos and apps furiously competing for new customers… or patrons… and sports leagues perhaps even, um, adjusting some of their rules to prevent tilting late-game scenarios, like fouling Ben Simmons 30 fucking times in a row to threaten an over-under.

Can this have wider implications?

You bet.

A narrow ruling tailored specifically to gambling would allow for states to legalize it over the next few years. But a broader ruling about federal mandates on state issues could impact marijuana, gun control, immigration, marriage, and more. Odds are New Jersey wins.